Published: Thursday, January 7, 2010
Gregoire hopes help from feds can head off tax increases
If federal money doesn’t show up, the governor plans to balance budget with new taxes and some reserves.
OLYMPIA — Gov. Chris Gregoire is putting the final touches on a plan for balancing the deficit-plagued state budget that hinges on a spate of new taxes.
It is going to be an incomplete product, she warned Wednesday, as she waits to see if Congress comes through with additional aid for cash-strapped states.
If it does, it could net enough money for Washington that she won’t have to seek new tax revenue and can instead erase the budget’s red ink by spending less, draining reserves.
But if those dollars don’t materialize, then she will turn to tax revenue to help cover a $2.6 billion deficit and avert elimination of education, health care and human services programs, she told reporters at a forum hosted by The Associated Press.
Gregoire said bridging the multi-billion dollar chasm is the top task facing her and the Legislature which convenes Monday for a scheduled 60-day session.
The situation is dire.
Last month, state Treasurer Jim McIntire wrote the governor and legislative leaders of the Democratic and Republican parties cautioning them that Washington could run out of money to pay its bills later this year unless state spending is sharply reduced or bundles of new revenue are raised. He said the state might need a loan to operate if its supply of cash dries up.
Gregoire acknowledged the warning Wednesday, noting they assume “nothing happens” in the legislative session to rectify the budget’s imbalance. She expressed confidence the initial budget proposed last month and the one coming out next week will resolve his concerns.
She wouldn’t say what taxes are penciled into the plan which she will present to the Senate Ways and Means Committee on Tuesday. It will become the subject of public hearings and the foundation on which the House and Senate construct their own budget versions.
Closing tax loopholes, axing tax exemptions and tacking taxes onto some products and services for the first time are all in the mix, she acknowledged. She said she’s still looking to come up with about $700 million in revenue so the state won’t reduce funding for such programs as college financial aid, early learning and the Basic Health Plan.
Those programs are decimated or gone in the initial budget proposal Gregoire issued in December. At the time, Gregoire said she couldn’t live with what she wrote and vowed to write another version that — in spite of promises in two campaigns — called for new or higher taxes.
Other issues are on her plate, too. These include:
Criminal justice: She will back amending the state constitution to give judges more discretion to deny bail to some convicted felons facing new criminal charges. This is prompted by the slaying of four Lakewood police officers by a man out on bail awaiting trial on charges that could have put him behind bars for life under the state’s Three Strikes law.
Education: She will propose giving the state a greater role in dealing with failing schools and improves the process of evaluating teachers. Her goal is to qualify the state for up to $250 million from the federal Race to the Top initiative.
Economy: Gregoire is drawing up legislation to spur creation of jobs and assist small businesses in areas of the state hit hardest by the recession. She also said she will propose measures to help cities and counties such as suspending some state-imposed mandates.
Reporter Jerry Cornfield: 360-352-8623; jcornfield@heraldnet.com
It is going to be an incomplete product, she warned Wednesday, as she waits to see if Congress comes through with additional aid for cash-strapped states.
If it does, it could net enough money for Washington that she won’t have to seek new tax revenue and can instead erase the budget’s red ink by spending less, draining reserves.
But if those dollars don’t materialize, then she will turn to tax revenue to help cover a $2.6 billion deficit and avert elimination of education, health care and human services programs, she told reporters at a forum hosted by The Associated Press.
Gregoire said bridging the multi-billion dollar chasm is the top task facing her and the Legislature which convenes Monday for a scheduled 60-day session.
The situation is dire.
Last month, state Treasurer Jim McIntire wrote the governor and legislative leaders of the Democratic and Republican parties cautioning them that Washington could run out of money to pay its bills later this year unless state spending is sharply reduced or bundles of new revenue are raised. He said the state might need a loan to operate if its supply of cash dries up.
Gregoire acknowledged the warning Wednesday, noting they assume “nothing happens” in the legislative session to rectify the budget’s imbalance. She expressed confidence the initial budget proposed last month and the one coming out next week will resolve his concerns.
She wouldn’t say what taxes are penciled into the plan which she will present to the Senate Ways and Means Committee on Tuesday. It will become the subject of public hearings and the foundation on which the House and Senate construct their own budget versions.
Closing tax loopholes, axing tax exemptions and tacking taxes onto some products and services for the first time are all in the mix, she acknowledged. She said she’s still looking to come up with about $700 million in revenue so the state won’t reduce funding for such programs as college financial aid, early learning and the Basic Health Plan.
Those programs are decimated or gone in the initial budget proposal Gregoire issued in December. At the time, Gregoire said she couldn’t live with what she wrote and vowed to write another version that — in spite of promises in two campaigns — called for new or higher taxes.
Other issues are on her plate, too. These include:
Criminal justice: She will back amending the state constitution to give judges more discretion to deny bail to some convicted felons facing new criminal charges. This is prompted by the slaying of four Lakewood police officers by a man out on bail awaiting trial on charges that could have put him behind bars for life under the state’s Three Strikes law.
Education: She will propose giving the state a greater role in dealing with failing schools and improves the process of evaluating teachers. Her goal is to qualify the state for up to $250 million from the federal Race to the Top initiative.
Economy: Gregoire is drawing up legislation to spur creation of jobs and assist small businesses in areas of the state hit hardest by the recession. She also said she will propose measures to help cities and counties such as suspending some state-imposed mandates.
Reporter Jerry Cornfield: 360-352-8623; jcornfield@heraldnet.com
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